Using Solar & Energy Storage To Build Resilient Communities
In the late summer and fall in recent years, the power has been going out more often in California. Utilities are turning off residents’ power preemptively in unprecedented numbers. Energy storage systems owned by residents and public agencies, including those that are paired with solar generators, have the ability to safely provide power when the grid goes down, and can help utilities avoid the problems that cause certain outages.
The power shutoffs occur for two very different reasons. The first is fire prevention. In Public Safety Power Shutoffs (PSPS), utilities preemptively disconnect power when extreme fire danger exists and high winds could cause power lines to spark fires. These shutoffs impact many people and can last for prolonged periods of time. In 2019, utilities in California turned off power to over two million homes and businesses as a part of the PSPS program. These outages lasted between two and 12 days at a time. Preliminary reports show that approximately 700,000 homes and businesses lost power as a result of PSPS in 2020. The 2020 outages lasted between one and six days at a time. PSPS are ordered by utilities under the supervision of the California Public Utility Commission (CPUC).
The second reason utilities have shut off power recently is inadequate energy supply. When California does not have enough energy supply to meet its need, the California Independent System Operator (CAISO) orders rolling blackouts. These shutoffs typically impact fewer people and are shorter than PSPS, typically lasting only a few hours at a time. This summer, an extreme heat wave blanketed the western US, and for the first time in almost 20 years California was unable to supply enough energy to meet its needs. On the evenings of August 14 and 15, 2020, utilities cut power to approximately 813,000 homes and businesses. The outages lasted up to two-and-a-half hours.
While the responsibility for PSPS clearly lies with utilities and the CPUC, the responsibility to prevent rolling blackouts does not lie with a single entity. Instead, various State agencies are responsible for the conditions leading to these blackouts. The California Energy Commission publishes a forecast of the amount of energy the State needs for each season and month of the year. The CPUC uses the California Energy Commission’s forecast to determine the types of new power plants and the amount of power utilities need. The CPUC orders utilities to enter into contracts with power generators to meet those requirements. Utilities then sell energy from their contracted generators into the CAISO’s wholesale power market. When generators do not offer enough supply into the wholesale power market to meet demand, CAISO attempts to locate more supply. If CAISO is unable to locate more supply, it orders rolling blackouts pursuant to rules approved by the Federal Energy Regulatory Commission.
Energy storage systems can help utilities avoid rolling blackouts.
Customers and public agencies who pair their solar panels with energy storage systems can help utilities avoid rolling blackouts like those experienced in 2020. This year’s blackouts occurred in the evening during a week-long heat wave. Temperatures were hot, air conditioning and total electricity use was high, and, given the time of day, most solar panels were no longer generating their maximum output. Energy storage systems can be programmed to charge from the solar panels in the daytime, and then to discharge that power after the sun wanes, when power supplies are often constrained. Storage systems can provide power to an individual home or business or export power to the grid.
State programs can incentivize this use of energy storage systems. For example, the CPUC has established the Net Energy Metering 2.0 rate which ties compensation for power exported to the grid from energy storage systems to the price of electricity at a particular time of day. Electricity customers on the Net Energy Meeting 2.0 rate are therefore incentivized to export energy at times when the grid is most at risk of rolling backouts. However, to truly unlock the potential of this energy storage systems, the State should implement stronger incentives. Advocates for distributed energy storage systems are pushing for the implementation of additional programs with price signals that reflect the significant benefits this technology can provide for the entire system.
Public agencies use backup power and offer shelter in response to power outages.
Solar panels and energy storage systems can also be used by public agencies providing essential services and offering cooling or warming shelters to residents during emergencies. Facilities that house emergency operations and shelters often have their own backup generators so that they are able to operate while the electric power grid is down. Traditionally, these facilities’ backup generators run on diesel fuel.
However, today many public agencies are instead installing solar panels and energy storage systems to provide backup power at these sites. The costs of battery storage systems have dropped significantly in recent years, and the State has developed specific incentive programs for batteries installed for these purposes. Multiple vendors now offer battery systems that can keep the electricity on in a building even when the grid is down. This offers a cleaner energy alternative because no on-site pollution is produced and batteries can be charged with solar energy. Energy services companies often provide financing options, allowing public agencies to avoid significant up-front capital expenditures when installing or upgrading battery backup, solar, heating, cooling, and/or lighting systems.
Batteries can also provide the opportunity to earn revenues from directly participating in CAISO’s wholesale market, though public agencies that install batteries to provide backup power often elect not to participate in CAISO’s market because doing so requires emptying the battery from time to time.
There are many additional benefits to pairing battery backup systems with solar panels. When the grid is down for multiple days, the solar panels recharge the battery and allow the facility to continue to operate independently of the grid until service is restored. When connected to the grid, the solar panels produce energy the facility uses, ensuring the investment intended to provide backup generation yields returns under ordinary circumstances. In contrast, diesel generators are used only in emergencies and also pose their own fire risks.
A public agency with a campus could also develop a microgrid, which pairs multiple solar generators and battery systems across multiple buildings. Microgrids allow an entire campus or neighborhood to operate independently of the electric grid during emergencies.
Energy storage systems paired with solar panels can help mitigate the direct impacts of climate events like heatwaves, while also cleaning up our electricity supply and minimizing the number of power shutoff events. Batteries are also enabling a greater role for everyday citizens and public agencies to actively participate in reducing pollution associated with energy production and ensuring safe and healthy communities during extreme weather events.
For more information about solar and energy storage development, contact SMW attorney Yochi Zakai.